Halliburton, Baker Hughes in Talks to Sell Assets to Carlyle Group

By Dana Mattioli and Ryan Dezember 

Private-equity firm Carlyle Group LP is in serious talks to buy a package of oilfield-services businesses from Halliburton Co. and Baker Hughes Inc. that could be valued at more than $7 billion, as the energy giants seek to overcome a Justice Department challenge to their planned merger.

Talks between Carlyle and the companies are far along, though not yet exclusive, people familiar with the matter said. The talks mark a shift for Halliburton and Baker Hughes, which for months have been focused on reaching a deal to sell the assets to General Electric Co.

GE and the energy companies have had problems agreeing on a price for the assets, some of the people said. GE is still in the mix, they added.

The need for Baker Hughes and Halliburton to strike a divestiture deal took on increased urgency last week when the Justice Department filed an antitrust lawsuit challenging their $35 billion proposed deal, arguing it would threaten higher prices and reduce innovation in the oilfield-services industry. The two sides agreed to the deal in November 2014.

As always, the talks with Carlyle could fall apart before an agreement is reached, and even if there is one, there is no guarantee the government won't stand in the way.

Indeed, Justice Department antitrust chief Bill Baer last week said, "There's no fix to this transaction." He also said the gap between the two sides was "a chasm" and that settlement talks were never really under way because the government and the companies fundamentally disagreed on the competitive impacts of the merger.

--Alison Sider, Ted Mann and Brent Kendall contributed to this article.

Write to Dana Mattioli at [e-mail] and Ryan Dezember at [e-mail]

(END) Dow Jones Newswires

April 14, 2016 14:43 ET (18:43 GMT)

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